In a breather for the beleaguered telecom major Reliance Communications (RCom), Supreme Court on Friday ordered the Department of Telecommunications (DoT) to approve the company’s earlier proposed spectrum trading plans with Reliance Jio within 7 days. Separately, the apex court has also asked the Anil Ambani group firm to furnish corporate guarantees of Rs 1,400 crore within two days.
RCom’s wholly-owned subsidiary Reliance Realty will submit a corporate guarantee of Rs 1,400 crore within two days, an RCom spokesperson, confirming the development, said.
The move will help RCom complete its already delayed asset sale plans and reduce debt to about Rs 25,000 crore. RCom has also moved DoT seeking approvals to sell off its remaining spectrum in 850 MHz band, which is expected to fetch another Rs 3,700 crore.
RCom was expecting to raise Rs 13,000 crore from the sale of its spectrum and towers in the final leg of its proposed debt reduction plans. Following the completion of spectrum and tower sales, RCom intends to pay off Ericsson and minority shareholders of Reliance Infratel Ltd, including HSBC Daisy Investments.
Following the completion of the spectrum deal, RJio will add Rs 7,000 crore of RCom’s deferred spectrum liabilities on to its books. RCom’s present is about Rs 40,000 crore.
Last year, Ericsson had moved the National Company Law Tribunal (NCLT) seeking bankruptcy proceedings against RCom and its two units (Reliance Infratel and Reliance Telecom) to recover dues of ₹1,150 crore. This move had jeopardised RCom’s bailout package.
Earlier in August, in its first tranche of asset transfer RCom closed the sale of its media convergence nodes (MCNs) and related infrastructure assets worth Rs 2,000 crore to Mukesh Ambani-backed Reliance Jio Infocomm (RJio). The company had transferred 248 nodes, covering about 5 mn sq. ft. of area used for hosting the telecom infrastructure.
Later during the month, RCom sold its about 1.78 lakh route km optical fibre in India and related assets to RJio for Rs 3,000 crore.
In December last year, RJio said it will acquire the wireless assets of RCom, paving way for another deal between the brothers – Mukesh and Anil – who had parted ways in 2005, carving the Reliance empire into two.
RJio, a wholly-owned subsidiary of RIL, emerged as the successful bidder in a two-stage bidding process. The company announced plans to acquire RCom’s more than 43,000 towers, 1.78-lakh route km of optical fibre cable network, 122.4 MHz of spectrum in the 800, 900, 1800 and 2100 MHz bands and 248 MCNs. These assets are expected to contribute significantly to the large-scale roll-out of RJio’s wireless, fibre-to-home and enterprise services. – The Hindu BusinessLine